Employers don’t have to suffer an actual loss in order to justify dismissal — the potential for harm will often suffice
When it comes to firing an employee for cause, the employer doesn’t always need to have suffered a loss — potential harm is often sufficient in the eyes of the court. That principal was affirmed in a recent case involving a Toronto banker who helped her common-law husband Patrick Lee, who worked as a real estate agent, with a number of shady transactions.
In Ng v. Canadian Imperial Bank of Commerce, Chrisloran Ng worked as a financial advisor for CIBC at one of its Toronto branches. She started working for CIBC in 1978, holding various positions over the years. As a financial advisor, she was responsible for obtaining and looking after consumer sales, mortgages, personal loans and investment portfolios with the goal of generating new business.
Ng was earning a base salary of $45,000, a wage she could substantially increase through bonuses by meeting certain targets. Lee, her common-law husband, would often steer business towards her through his real estate transactions.
She was fired, without notice, by the bank on April 3, 2000, for breach of trust after it found out she had improperly handled a number of certified cheques for her husband, cashed cheques for him when he was in jail and other improprieties.
In one example presented to the court, Lee approached Ng with a certified cheque for $50,000. The cheque given to Lee was made out to the real estate company he worked for as a deposit on the sale of a property worth $772,500. The deposit was to be given to the real estate company to be held in trust until the deal was closed, at which time it would be deducted from the purchase price.
Lee took the cheque to Ng at CIBC and asked her to do him a favour. He wanted her to split the cheque into a $5,000 certified cheque for the real estate company and a $45,000 certified cheque made payable to Simon Ng, who Lee claimed was the purchaser’s lawyer. Lee told her the purchaser did not trust the real estate company to hold such a big cheque. Ng asked Lee why he didn’t simply return the $50,000 cheque to the purchaser and get the proper cheques. He told her he didn’t want to bother the purchaser because he was very difficult to deal with.
None of the parties involved were CIBC customers. The cheque was drawn on the Toronto-Dominion bank. The only person Ng contacted was someone at TD to confirm the money was in the account. She did not contact the purchaser, the vendor, the real estate company or the lawyer. As it turned out, there was no Simon Ng and the lawyer for the purchaser was David Clark. Ng completed the transaction and issued Lee two cheques because she said she trusted him.
The judge thought otherwise. Ng and Lee had an acrimonious relationship that would hardly form the basis for any kind of trust, said Justice Mandel of the Ontario Superior Court of Justice. Lee had a gambling problem and was often unfaithful to Ng. He stole money from her bank account and, “it is not credible that in those circumstances she trusted him.
“Furthermore, the story he tells her is incredible having regard to the cheque being dated Jan. 31, 2000, and the very same day Patrick tells her that the purchaser does not trust (the realtor) to hold a $50,000 deposit cheque. If the purchaser does not trust (the realtor), why did he make out such a cheque in the first place and have it certified?”
Just 11 days later, he came in with a similar request and Ng complied with that as well. It formed part of a history of inappropriate actions that led to her dismissal.
Further allegations arose after she was dismissed, and the bank relied on them during the trial. Ng’s lawyers tried to have the additional evidence thrown out, but the court allowed it, citing the case of Lake Ontario Portland Cement Co. v. Groner. That case stated that “it is not necessary that the master, dismissing a servant for good cause, should state the ground for such dismissal; and provided good ground existed in fact, it is immaterial whether or not it was known to the employer at the time of dismissal. Justification of dismissal can accordingly be shown by proof of facts ascertained subsequently to the dismissal, or on grounds differing from those alleged at the time.”
Ng argued a suspension would have been more appropriate than outright termination. But the court disagreed.
“She used her position at the bank to confer favours on (friends) to the prejudice of the bank,” wrote Justice Mandel. “In doing so, she repudiated one of the basic and essential elements of her employment with the resulting loss of trust and confidence by the employer.”
Citing the case of Duran v. Quaker Oats Co. of Canada Ltd., the court said an employer cannot be faulted for choosing to dismiss the employee rather than imposing a lesser discipline where there is serious and prejudicial misconduct.
The court found the bank had just cause, and the wrongful dismissal action was dismissed.
For more information see:
• Ng v. Canadian Imperial Bank of Commerce, 2003 CarswellOnt 3874, 28 C.C.E.L. (3d) 224 (Ont. S.C.J.).
• Lake Ontario Portland Cement Co. v. Groner, [1961] S.C.R. 553 (S.C.C.) citing Halsbury’s Laws of England 2nd ed. Vol. 22 p. 155.
In Ng v. Canadian Imperial Bank of Commerce, Chrisloran Ng worked as a financial advisor for CIBC at one of its Toronto branches. She started working for CIBC in 1978, holding various positions over the years. As a financial advisor, she was responsible for obtaining and looking after consumer sales, mortgages, personal loans and investment portfolios with the goal of generating new business.
Ng was earning a base salary of $45,000, a wage she could substantially increase through bonuses by meeting certain targets. Lee, her common-law husband, would often steer business towards her through his real estate transactions.
She was fired, without notice, by the bank on April 3, 2000, for breach of trust after it found out she had improperly handled a number of certified cheques for her husband, cashed cheques for him when he was in jail and other improprieties.
In one example presented to the court, Lee approached Ng with a certified cheque for $50,000. The cheque given to Lee was made out to the real estate company he worked for as a deposit on the sale of a property worth $772,500. The deposit was to be given to the real estate company to be held in trust until the deal was closed, at which time it would be deducted from the purchase price.
Lee took the cheque to Ng at CIBC and asked her to do him a favour. He wanted her to split the cheque into a $5,000 certified cheque for the real estate company and a $45,000 certified cheque made payable to Simon Ng, who Lee claimed was the purchaser’s lawyer. Lee told her the purchaser did not trust the real estate company to hold such a big cheque. Ng asked Lee why he didn’t simply return the $50,000 cheque to the purchaser and get the proper cheques. He told her he didn’t want to bother the purchaser because he was very difficult to deal with.
None of the parties involved were CIBC customers. The cheque was drawn on the Toronto-Dominion bank. The only person Ng contacted was someone at TD to confirm the money was in the account. She did not contact the purchaser, the vendor, the real estate company or the lawyer. As it turned out, there was no Simon Ng and the lawyer for the purchaser was David Clark. Ng completed the transaction and issued Lee two cheques because she said she trusted him.
The judge thought otherwise. Ng and Lee had an acrimonious relationship that would hardly form the basis for any kind of trust, said Justice Mandel of the Ontario Superior Court of Justice. Lee had a gambling problem and was often unfaithful to Ng. He stole money from her bank account and, “it is not credible that in those circumstances she trusted him.
“Furthermore, the story he tells her is incredible having regard to the cheque being dated Jan. 31, 2000, and the very same day Patrick tells her that the purchaser does not trust (the realtor) to hold a $50,000 deposit cheque. If the purchaser does not trust (the realtor), why did he make out such a cheque in the first place and have it certified?”
Just 11 days later, he came in with a similar request and Ng complied with that as well. It formed part of a history of inappropriate actions that led to her dismissal.
Further allegations arose after she was dismissed, and the bank relied on them during the trial. Ng’s lawyers tried to have the additional evidence thrown out, but the court allowed it, citing the case of Lake Ontario Portland Cement Co. v. Groner. That case stated that “it is not necessary that the master, dismissing a servant for good cause, should state the ground for such dismissal; and provided good ground existed in fact, it is immaterial whether or not it was known to the employer at the time of dismissal. Justification of dismissal can accordingly be shown by proof of facts ascertained subsequently to the dismissal, or on grounds differing from those alleged at the time.”
Ng argued a suspension would have been more appropriate than outright termination. But the court disagreed.
“She used her position at the bank to confer favours on (friends) to the prejudice of the bank,” wrote Justice Mandel. “In doing so, she repudiated one of the basic and essential elements of her employment with the resulting loss of trust and confidence by the employer.”
Citing the case of Duran v. Quaker Oats Co. of Canada Ltd., the court said an employer cannot be faulted for choosing to dismiss the employee rather than imposing a lesser discipline where there is serious and prejudicial misconduct.
The court found the bank had just cause, and the wrongful dismissal action was dismissed.
For more information see:
• Ng v. Canadian Imperial Bank of Commerce, 2003 CarswellOnt 3874, 28 C.C.E.L. (3d) 224 (Ont. S.C.J.).
• Lake Ontario Portland Cement Co. v. Groner, [1961] S.C.R. 553 (S.C.C.) citing Halsbury’s Laws of England 2nd ed. Vol. 22 p. 155.
| Potential harm is sufficient The court cited a number of cases to support the idea that the potential for harm to the employer was adequate to justify termination without notice: •Actual loss to the employer need not be proved, potential harm is sufficient. Canadian Imperial Bank of Commerce v. Boisvert, 1986 CarswellNat 206, 1986 CarswellNat 682, 13 C.C.E.L. 264 (Fed. C.A.); Laverty v. Cooper Plating Inc., 1987 CarswellOnt 897, 17 C.C.E.L. 44 (Ont. Dist. Ct.); Marks v. Addison On Bay Ltd., 1991 CarswellOnt 967, 38 C.C.E.L. 291 (Ont. Gen. Div.). •It is the conduct that creates the risk of harm and not the proof of loss that matters. Ennis v. Canadian Imperial Bank of Commerce, 1986 CarswellBC 732, 13 C.C.E.L. 25 (B.C. S.C.) •It is whether there are grounds sufficient to warrant the loss of trust and confidence in the employee by the employer that is the guiding factor. Durand v. Quaker Oats Co. of Canada Ltd., 1990 CarswellBC 100, 32 C.C.E.L. 63 (B.C. C.A.); Ennis v. Canadian Imperial Bank of Commerce. |
